So true. Take the 3.5% yield on a ten year, take off tax and then inflation and see how much you have left….negative income ….and the possibility of capital loss if the yield does start moving up and you want to sell.
However, if the whole economy extends the recession right though the second half of 08, I suppose there is a chance that fright will drive big investors temporarily again into Treasuries (double dip)and inflation is so far relatively quiescent as suppliers absorb high input inflation in the face of wakening demand.
The big threat comes when recovery does start. Inflation will probably rise and investors will be out of those ten year bonds chasing opportunities; carpet bag style.
